Mr. Paul Joyce:

I will pick up the point on the code of conduct on mortgage arrears Mr. O'Brien made. It is important for that code to be reformed from pillar to post. I keep repeating it but many recommendations have been made. The code of conduct on mortgage arrears is the instrument that the mortgage lender uses to assess the borrower's capacity to enter into what is called an alternative repayment and, as Mr. O'Brien said, a suite of alternative repayment arrangements are set out in the code. We suggest that the mortgage arrears review office, if one was set up, should be the avenue of appeal for borrowers who are unhappy with what their lender proposes or fails to propose to them when they get into a mortgage arrears situation. The appeal is currently to the lender's arrears support unit, as it is called, and to an appeals board set up by the lender, so it is not an independent appeal.

Talking about legacy cases, it was the failure of the mortgage arrears resolution process to work in a radical and comprehensive way that led to many of these legacy cases. Many of the banks put borrowers on interest-only or interest and a small amount of principal rather than putting in place radical solutions to mortgage arrears problems early. Many of those cases migrated into the courts eventually. There should be more radical action when the arrears problem occurs. That should also happen with unsecured credit arrears. We tend to forget, in this discussion, that many people who have mortgage arrears also, naturally enough, have unsecured consumer credit agreements in arrears. As I said earlier, many people who do not have mortgages have rent and rents are in danger of arrears. Not only should there be a code of conduct on mortgage arrears, there should be a proactive code of conduct on all kinds of credit arrears to get in there early, to stop things from getting out of hand, and to put in place legally enforceable arrangements.